04-10-2003, 09:14 PM
Taxing spending via a value added tax, called IVA there, is how Italy handles tax, as well as things like the high petrol tax scheme. There is no income tax as we know it, if my neighbors were to be believed. IVA is, last I remember, around 19%. What that does is create a great number of tax evaders, the Italians could write the book on that one, partly for the reasons that you cite.
The folks in the bottom third are the ones who, as a proportion of what they earn or have to spend, get hit the hardest.
Progressive income tax in the US used to be Far More Burdensome. I remember looking at the tax tables when I was a boy, and up in the multihundred of thousands income area, the tax rate was in the 70-80% range. That would be late 1960's. I remember asking my father about that, and he tried to explain it to me. In the past 20 years, I have noted that sales taxes, our version of IVA, have been creeping up to fund government at the state and local level. Here in Texas, where there is no State income tax, the sales tax is up there, somewhere in the 8% range.
The tax reforms started in the early Reagan years, which have continued, have greately reduced the marginal tax rate to where I think the highest marginal tax rate is now in the 40% range in income. That calculus goes under review every year in our Congress, and is subject to a great deal of public, and as I see it healthy, debate.
As I understand it, American taxation is at present aimed to be less of a burden to families on the lower end of the spectrum, since they have the lowest margin of safety between necessities and discretionary spending and capacity to invest. I actually think it works pretty well, and would only suggest that the deduction for kids should go up slightly. (I am biased, I have children. :) )That is a social decision aimed at inducing folks to believe they have the option to have a family without going into the red permanently.
The folks in the bottom third are the ones who, as a proportion of what they earn or have to spend, get hit the hardest.
Progressive income tax in the US used to be Far More Burdensome. I remember looking at the tax tables when I was a boy, and up in the multihundred of thousands income area, the tax rate was in the 70-80% range. That would be late 1960's. I remember asking my father about that, and he tried to explain it to me. In the past 20 years, I have noted that sales taxes, our version of IVA, have been creeping up to fund government at the state and local level. Here in Texas, where there is no State income tax, the sales tax is up there, somewhere in the 8% range.
The tax reforms started in the early Reagan years, which have continued, have greately reduced the marginal tax rate to where I think the highest marginal tax rate is now in the 40% range in income. That calculus goes under review every year in our Congress, and is subject to a great deal of public, and as I see it healthy, debate.
As I understand it, American taxation is at present aimed to be less of a burden to families on the lower end of the spectrum, since they have the lowest margin of safety between necessities and discretionary spending and capacity to invest. I actually think it works pretty well, and would only suggest that the deduction for kids should go up slightly. (I am biased, I have children. :) )That is a social decision aimed at inducing folks to believe they have the option to have a family without going into the red permanently.
Cry 'Havoc' and let slip the Men 'O War!
In War, the outcome is never final. --Carl von Clausewitz--
Igitur qui desiderat pacem, praeparet bellum
John 11:35 - consider why.
In Memory of Pete
In War, the outcome is never final. --Carl von Clausewitz--
Igitur qui desiderat pacem, praeparet bellum
John 11:35 - consider why.
In Memory of Pete